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Channel/Dealer Financing

Land, Machinery, Infrastructure – check. Need capital for growth? Solution lies in Channel Dealer Financing. Bid farewell to waiting long periods of time and missing the punch that your business requires. Smarter, faster, hassle-free, customer friendly financing is waiting to be availed.

Channel Financing is a short-term working capital facility provided by the bank to the dealers or suppliers to sustain a seamless workflow of business, to meet the need of working capital, or to avoid any difficulties in the payment.

Why Channel Dealer Financing?

  1. It ensures that there is a flawless flow of working capital and your business runs without a glitch.

  2. The cost of cash flow is reduced as there is a linkage between the sellers and buyers. The borrower’s balance sheet is not the only consideration while underwriting the loan.

  3. As the buyers pay for the inventory after it has been converted to cash, there is better cashflow.

  4. It ensures a steady growth while the current business remains steady.

Channel financing is needed when a supplier or a distributor is not in a situation to fulfil the working capital needs from the cash flows. The primary goal of channel financing (or dealer financing) is to empower manufacturing and trading companies to offer to their dealers, distributors on a cash basis and remove debts.

Dealer financing usually comes with a lower interest rate, longer loan term, and more flexible credit guidelines than bank financing. Dealer financing lets you enjoy some of the benefits of a traditional loan, even if you have poor credit. This type of financing can be used to buy a car, pay off a car loan, or make home improvements. It is only available at the time of purchase and can be used to finance the entire purchase price or a portion of the purchase price.

To avail, the dealer financing the common requirements are to have a fixed and steady income, good credit score, and advance arrangement of funds to make the down payment. You need to prove that you can bear the cost of advance/loan along with any of the existing debts you have taken. If you can’t get a sufficient amount of advance then you need to increase the down payment to decrease the loan amount you need to borrow, to reduce your monthly instalments of repayment.

Advantages of channel/dealer financing:

● Convenient application process

● Potential promotional offers

● Ability to negotiate terms

Disadvantages of channel/ dealer financing:

● Higher interest rates

● Potential for less transparency

● Less flexibility for lender options

Getting channel/dealer financing is an easy and simple process. The documentation requires less time as you can fill the form beforehand on the dealers’ website and it needs fewer documents like a driving license and proof of your fixed and regular income and just might check your credit history before approving your finance. Capital 9 experts are actively available for providing you with professional guidance and to help you apply for such loans.

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